The Bank of Mexico delivered an essentially neutral message to the market Friday, providing little indication that it would adjust interest rates again this year. But traders in Mexico City are hanging on to a different view.

In the interest-rate swaps market, ahead of today’s statement from the central bank investors were discounting a 25-basis point cut in the central bank’s target overnight rate before the end of the year, and they haven’t budged much since, says Ramon Diaz Nava, director of derivatives at brokerage Interacciones.

That puts the market at odds with most economists, who don’t see the Bank of Mexico cutting rates further after they slashed the benchmark lending rate by half a percentage point last month. That was the central bank’s first rate change in four years.

At the heart of the debate is whether inflation in Latin America’s second-biggest economy will remain under control this year, and its recent slowdown in growth will continue. Consumer prices jumped 4.72% in early April from a year ago, far exceeding the 4% ceiling of the Bank of Mexico’s target range for inflation. Bank of Mexico Gov. Agustin Carstens said Thursday the inflation spike will prove to be temporary, and price pressures will ease in the second half of the year.

Speculators in Mexico’s financial market seem to agree, and they are betting that a soft patch of economic growth combined with slowing inflation will prompt policy makers to take action in the second half. Traders say the 6.5% surge in the Mexican peso against the dollar, a hedge fund darling this year, will give the Bank of Mexico another reason to trim interest rates, which would make the country’s financial markets slightly less appealing to foreign investors.

“The board was indeed dovish when referring to global and domestic growth deceleration, and set up the conditions for a rate cut if inflation recedes,” notes Mexican bank Banorte-Ixe.